By Dana Blackenhorn

While we're all celebrating new highs in the Dow Jones Industrial Average ($INDU), Apple (AAPL) remains in the doldrums.

At its current value of about $430 a share, it's $270 below its October high of $700. Over a quarter of a billion dollars in value has been destroyed. Doesn't sound like much in a market whose value is approaching $20 trillion, according to the Wilshire Index.

But consider this: Since October's Apple high, the Wilshire has advanced only a little more than 1,000 points, adding about $1.2 trillion to the market's value. If Apple had just stayed where it was, that figure would be about $1.45 trillion. For every $5 in total stock market advance during the period, Apple by itself lost the market $1.

The point is that what happens to Apple does matter to the total market. Even at its present depressed level, $400 billion is nothing to sneeze at.

Writers here at TheStreet.com are as confused as anyone else about what's going on. Rocco Pendola blames management. I'm more inclined to believe that everyone was "in" at $700 so there were no more buyers, and a rush to the exits ensued.

I personally believe Apple is just one solid press conference away from being a $500 stock, and one hit product away from being a $600 one. Mere rumors of an iPhone 5s sent the stock up 2.5% on Tuesday, TheStreet reported.

Doug Kass says Apple remains fine for trading (read on TheStreet), and that he recently made a little money on it. Kass made the bear case in September, so his words here carry weight.

His earnings estimates are still below consensus, yet he's predicting nearly $42 a share in 2013 earnings, implying a forward price-to-earnings multiple of just 10.1. And his bearish case sees earnings growing 10% per year. I think Kass sees Apple as fairly valued.

Intel (INTC) currently carries a price-to-earnings multiple of 10.1. Analyst estimates for its earnings this year, according to Yahoo Finance, are $1.94 a share, and for next year $2.10. Which would you rather own?

Apple's business problem is basic. Its markets have moved quickly, so while the iPad is only four years old its market is fairly mature and the iPhone's market is practically ancient. Value pricing is called for in these cases, but Apple doesn't do value pricing -- it only does premium pricing. Thus, Apple has lost share and should continue to lose it.

Unless, that is, it creates new markets, or finds a way to deliver a value price with a premium margin.
Apple rumors involve three new products:

1. An Apple TV, a big screen with its iOS operating system acting as a set-top box compatible with other Apple devices and the iTunes store. Thus, you could program the evening's viewing from your iPhone at work and buy shows a la carte instead of taking cable. It would also make a sweet game machine. Figure most of us pay $3-$4 a day for cable and maybe we can all cut that cord.
2. An Apple watch. Apple has 79 patent applications using the word "wrist," a 10% share of the global industry would be a cool $6 billion, and margins on watches run as high as 60%.
3. A cheaper iPhone, which would be aimed at China and Brazil, with features like fingerprint sensors for security and a push at the prepaid market.

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